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Volume 2018 - Number 43

November 16, 2018

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REIT MBS Holdings Grow in 3Q18 as Industry Continues to Consolidate

Real estate investment trusts boosted their holdings of residential MBS during the third quarter, a period when two firms were acquired by larger players. [Includes one data chart.]

Meetings Scheduled for January as Nonbanks Ponder Impact of Ginnie ‘Liquidity Letter’

Increasingly worried about withering loan production and declining profitability of the mortgage industry at large, Ginnie Mae recently sent a letter to its 14 largest nonbank counterparties, asking them to develop strategies to right-size their operations.

Ellington Financial to Convert to REIT Status; Cites Significant Tax Savings

Tax cuts signed into law at the end of 2017 prompted Ellington Financial to make plans to convert from a partnership to a real estate investment trust. The maneuver will require the company to sell some holdings that donít meet REIT asset requirements, including collateralized loan obligations and investments in foreign MBS.

Judge Allows ABS Investors to Intervene in CFPB Case Against Securitization Trusts

The Structured Finance Industry Group has welcomed a recent court ruling that allows ABS investors to intervene in a case brought by the Consumer Financial Protection Bureau that aimed to hold securitization trusts liable for violations committed by servicers.

MBS Trading Volume Hits a Four-Month High, But Anxiety Prevails in the Overall Mortgage Market

The average daily trading volume in agency MBS increased to $222.7 billion in October, the best reading since June, according to figures compiled by the Securities Industry and Financial Markets Association.

Wall Street Pleased by Dismissal of Controversial CDO Bankruptcy Case Prompted by Senior Investors

An involuntary bankruptcy of a $630.2 million collateralized debt obligation was dismissed late last week, prompting praise from the Structured Finance Industry Group. Investors in senior tranches of the CDO had sought the bankruptcy, which SFIG warned would have yielded negative consequences for the securitization industry.

Wells Fargo Settles MBS Trustee Suits; Jury Awards $27.8 Million to ResCap; NY Court Affirms Ruling

Wells Fargo Bank last week agreed to a $43 million settlement with a group of institutional investors to resolve two class-action lawsuits related to certain legacy residential MBS that resulted in huge investor losses.

MBS and ABS Issuance at a Glance: November 16, 2018

MBS and ABS issuance and MBS market indicators at a glance.

Poll

With loan volumes declining, does your shop have plans to enter the non-QM lending market in 2019?

Yes, definitely. A solid move forward.
Yes, but only incrementally.
We’re pondering a move into non-QM, but haven’t made up our mind.
No, definitely not. We view it has too risky.

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